Short answer. Article 470 of the Civil Code provides that when one owner incorporated the accessory in bad faith and the other owner knew about it and did not object, their respective rights are treated as if both had acted in good faith. Mutual bad faith cancels out and the good-faith framework governs instead.
What the law says
If either one of the owners has made the incorporation with the knowledge and without the objection of the other, their respective rights shall be determined as though both acted in good faith.
Civil Code, Article 470 — Bad Faith in Adjunction. Read the full provision →
Three scenarios in Article 470
Article 470 addresses bad faith in adjunction — the joining of one thing to another where the combined object belongs primarily to one owner. Three outcomes are possible. First, if the owner of the accessory acted in bad faith, that person loses the thing incorporated and must indemnify the owner of the principal thing. Second, if the owner of the principal thing acted in bad faith, the owner of the accessory may demand payment for its value or require separation even if destruction of the principal is necessary — plus damages in both cases. Third, when one party knew about the incorporation and did not object, both are treated as if they had acted in good faith: "their respective rights shall be determined as though both acted in good faith."
When does knowledge without objection equal bad faith
The article's logic is consistent with how the Civil Code handles mutual bad faith in other contexts — it cancels out rather than compounding. If the owner of the principal thing watched the accessory being incorporated and said nothing, their silence is treated as complicity. They cannot later claim they were entirely innocent. Similarly, if the owner of the accessory knew the other would not object, the unilateral action loses its purely wrongful character. The mutual-knowledge situation is treated as constructively consensual.
What the good-faith framework means for each party
Under the good-faith rules for adjunction, the general principle is that the owner of the principal thing acquires ownership of the combined object but must reimburse the owner of the accessory for its value. Neither party suffers the harsher consequences reserved for unilateral bad faith: no forfeiture without compensation, no obligation to indemnify for the full range of consequential damages. The adjustment is financial rather than punitive. Both parties are treated as having acted reasonably, even if neither actually did.
Practical implications
If you are dealing with an adjunction dispute — a situation where your materials have been joined to another's principal item or vice versa — the question of who knew what and when is critical. Documentation of any communications about the proposed incorporation, or evidence that a party objected promptly when they discovered what was happening, will affect which rules apply. Silence at the time of incorporation, followed by a claim of bad faith in litigation, is precisely the situation Article 470 is designed to resolve in favour of the good-faith framework rather than the punitive one.